Why Comcast And Time Warner Are So Unpopular, And Could Be Even Worse Together

Comcast's plan to buy Time Warner Cable for $45.2 billion will face heavy government scrutiny to make sure it does not negatively affect consumers. One reason to be concerned is that both companies were already rated terribly for customer satisfaction, and mergers typically reduce customer satisfaction in the near term.

ACSI has noted that telecom companies, like airlines and large banks, many have low customer satisfaction scores because they are in industries with low competition. Unlike retail stores that have to compete for every dollar, telecom companies know that customers are slow to switch providers and sometimes have no alternative. When competition is available, as with satellite and fiber optic providers like DirectTV and Verizon in the television market, traditional cable providers are increasingly losing out.

People hate cable companies mostly due to "reliability issues," David VanAmburg, managing director of ACSI, said. "The cable guy has become a negative trope in American culture."

As for the prospect of a merger, this process has historically led to lower customer satisfaction scores due to complications in integrating two companies, according to ACSI. For instance, Delta's acquisition of Northwest in 2009 led to a "two-year customer satisfaction free-fall."

"Based on a couple of decades of data on lots of mergers, we've found that typically after two very large companies merge, customer satisfaction takes a hit for about a year or two," VanAmburg said.

Customers can expect possible confusion regarding servicing and billing, if previous similar mergers between two huge companies with portfolios of clients are any indication.

VanAmburg noted that the decline in customer satisfaction of two merging companies "is likely to be even more pronounced when those two companies already rank at the bottom."

Comcast and Time Warner are selling the merger in positive terms, promising "a leading technology and innovation company, differentiated by its ability to deliver ground-breaking products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale." In other words, they say they will be both better and cheaper.